Peso- and dollar-denominated loans disbursed by the Bangko Sentral ng Pilipinas through its rediscounting window posted a double-digit growth in the first quarter as credit demand in the country remained robust.

This developed as banks further stepped up their lending activities to generate more volume in the hope of offsetting the decline in earnings due to lower interest rates.

The BSP on Wednesday reported that it extended P10.99 billion worth of peso-denominated loans through its rediscounting window in January to March, up by 22 percent from P8.99 billion in the same period last year.

It also disbursed in the same period $46.1 million worth of dollar-denominated loans, up 38 percent from $33.3 million.

Rediscounted loans extended by the BSP to banks are meant to support their lending businesses, particularly to ensure that they meet short-term need for liquidity when they are tied with hefty receivables.

Receivables of the banks serve as collateral to the said loans, and the amount of loan a bank can secure under this facility represents the discounted value of the said collectibles.

The dollar-denominated loans are meant to help banks service the credit demand of importers, which need dollars to pay for the goods they purchase from abroad.

In 2012, the loan portfolio of universal and commercial banks grew by 16 percent year on year to P3.24 trillion.

Industry members expect lending growth to remain in the double-digit territory this year on the back of the market’s strong appetite for loans.

Demand for loans is fueled largely by the record-low interest rates, which have made funds accessible to a wider range of potential borrowers.

Last year, the BSP cut its key policy rates four times for a total of 1 percentage point. As a result, the central bank’s overnight borrowing and lending rates, which influence commercial interest rates, are now at historic lows of 3.5 and 5.5 percent, respectively.

Monetary officials said the rate cuts were meant to boost demand for loans and, therefore, fuel more consumption and investment activities.

They said domestic demand had to be boosted to help keep a healthy pace of growth for the Philippine economy despite weakness of the global economy.

The Philippine economy grew by 6.6 percent year on cyear in 2012, exceeding the official target of 5 to 6 percent.

The BSP said the robust growth of the economy last year was partly aided by the expansion of credit.

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